According to Allen, “A sound organisation can contribute greatly to the continuity and success of the enterprise”. In this sense, it is the foundation of management as well as its chief tool. This can be done through proper training and development programmes. Efficient organisation, thus, avoids all misunderstanding, confusions, conflicts, duplications and gaps. Here are just a few of the many things that are important to consider when thinking about the structure of your organization adapted from Factors Affecting Organizational Design...Strategy, Size, Organizaition … Following are some of the important advantages of a sound organizational design which have enhanced its importance and have, therefore, made it indispensable: The function of organizing is required for the performance of other functions of management like planning, staffing, directing and controlling. It ensures steady growth and diversification. Efficient organisation prevents growth of laggards, intrigues, wire-pulling and other forms of corruption. Such an atmosphere will give an opportunity for the staff to display their hidden creative talent, which, in turn, will lift the enterprise to higher goals of business and profits. Account Disable 12. All these factors assure stability to the enterprises. Organisation structure establishes hierarchy in the organisation; which clearly make an outline of the information flow. The top level executives perform the functions, like planning, organising, staffing, directing, controlling the lower level people. Clear-cut accountability provides recognition for the specialist and the professional in terms of their achievement. The information provided on this website does not constitute insurance advice. Inventory is a current asset on your company’s balance sheet. An organisation works in a dynamic environment and to cope with the changing business situation better technology is always helpful. Well-designed and balanced organisation facilitates management and operations of the enterprise. It has been said in some quarters that an organization without a leader is like an … 9. It facilitates the optimum use of resources and new technological developments. The bottom line is a company’s net income after all expenses have been paid out of its earnings. It specifies the channel and mode of communication among different members. Good organizational structure and design helps improve communication, increase productivity, and inspire innovation. Delegation of authority provides sufficient freedom to supervisors and this encourages initiative, creative thinking, resourcefulness, independent thinking spirit of innovation and enterprise among them. It allows most people to maintain a positive attitude towards self, others, works and life in general. The “bottom line” is at the heart of every business. 5. Organisation has efficient methods of selection, training, remuneration and promotion of employees. Unsound organisation becomes breeding ground for dishonesty, lethargy and disloyalty. Organisation is a fine structured process in which individuals interact (acting and reacting upon one another) to accomplish objectives. 6. It enhances the productivity through avoidance of duplication of activities and the consequential confusion as well as wastage of efforts. It is in this sense it is claimed that there is no substitute for good organisation. Area and activities of a business grow if it has a well-knit organisation. Paring back to just the essentials on your desk can help you stay focused on the work in front of you. Sound organisation is an essential prerequisite of efficient management. Innovate Why Change Is Essential to Your Organization (And How to Embrace It) Think back to your business's "why" to discover some areas to bring forth positive change. We may have top management in the hands of a few chief executives forming a top level executive committee running the affairs of very big enterprise. If an organisation is ill-designed and reveals a number of deficiencies, management is rendered difficult and ineffective. Instead of a single chief executive in a large company, Peter Drucker would prefer a team with a captain who is more than one among equals and each member of the top management team has assigned areas in which he makes formal decisions and for which he is responsible. Sound organisation stimulates creative thinking and initiative on the part of employees. This helps to check out that all necessary expenses are met, including taxations t… "After returning from a networking event, note how you met each contact, determine how to get the data into your CRM, and determine how to best serve those new relationships," Norris says. If the business owner is keeping a complete track of the sales, then they will also get an idea about how long it takes for them to reach break even or additional profit levels. Good organisation removes red-tapism and corruption, prevents duplications of work, makes communication easier, and provides a sound basis for workers participation in the management. The training may be given within the company or outside the company according to the training facilitates available. It is an important means of bringing coordination among the various departments of the enterprise. It is indeed the foundation of management”. Sound organisation structure stimulates creative thinking and initiative amongst organisational members by providing well defined patterns of authority. Effective organisation enables growth and diversification through decentralisation and divisionalisation on geographical or product basis. 6. If offers stimulating opportunities to people at all levels to use their skills on jobs best suited to their nature. A good organisation clearly defines the scope of work of every person and allows them to grow in that sphere. If persons are not encouraged to take new initiative then the management may not be able to cope with the changing business environment. Stimulates Creativity. There is proper allocation of work. Enlarges Abilities 6. Expenses mount up. We asked two professional organizers why organization is so important for small businesses and how they can stay organized for the long haul. Departments/units are formed on the basis of requirements of the enterprise. 11. Poor organisation may mean improper arrangement of facilities and failure to achieve goals. It ensures that every individual is placed on the job for which is best suited. (3) It Ensures Optimum Use of Human Resources: Organisation affects human resources in a number of ways such as recruitment, training, placement of workers, bringing harmony in their efforts, improving the communication network and motivating them to improve their efficiency. It helps equitable distribution of work. It also provides for efficient methods of selection, training and promotion of employees, further not as machines. Organisation is also essential for the continuity and stability of the enterprise. "If you're losing out on leads, opportunities, income, and quality of life, take stock of that human and financial cost," Norris says. It helps management in performing other management functions such as planning, direction, delegation, control etc. There is a planning, policy making, direction and co-ordination in the administration level to achieve the objectives. The following are the importance of organisational structure: 1. Professional organizers Julie Bestry and Vicki Norris explain why organization is such an important part of running a successful business. 8. For manufacturers, inventory includes raw materials used to make and assemble products. Following are the advantages of a sound organisation structure: 1. Important of finance for business organizations. It lays the basis for other managerial functions such as planning, direction, co-ordination and control. It permits management to respond in time to the changes in the environmental influences and make necessary adjustments to satisfy new demands of the society. It thus ensures the optimum use of staff. 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